The government announced on Saturday that around 45% of India's exports to the United States will remain exempt from the new additional tariff under the final Section 301 measures. India has been placed in the lower tariff tier, attracting an additional 10% duty instead of the initially proposed 12.5% levy.
US Final Section 301 Measures
The US on Friday announced additional tariffs on imports from India and 60 other economies over concerns related to the use of forced labour in manufacturing. The final measures were announced by the United States Trade Representative (USTR) on July 23 following a probe into policies and practices of the 60 economies.
New Delhi said sustained engagement with US authorities during the investigation helped secure the lower tariff tier and minimise the impact on Indian exports. The government made detailed submissions, held consultations, and participated in public hearings during the USTR probe.
Exemptions and Impact
Key export sectors including generic pharmaceuticals, smartphones, and certain specified products that currently attract zero additional duties will remain exempt. Products already covered under separate Section 232 measures, including steel, aluminium, and auto parts, will also not attract the additional duty. However, the remaining 55% of exports will face the additional 10% duty.
Despite the tariff, India’s tariff incidence remains comparatively lower than that applicable to most other economies covered under the USTR investigation, according to the government.
Textiles and Bilateral Trade Agreement
On textiles, the government noted that the mechanism referred to in the US measures is yet to be established and operationalised. India will continue discussions with Washington on the issue as part of negotiations for the India-US bilateral trade agreement.
“The government remains committed to working with the United States towards the early conclusion of the bilateral trade agreement,” it said, referring to the commitment announced on February 2 and a joint statement issued on February 7.
